Top 10 controversies in startup ecosystem this year you should know

The Indian startup ecosystem witnessed many controversies this year when it faces various allegations, FIRs, notices, lawsuits and incarcerations.

We have listed the top 10 controversies which rattled the startup ecosystem and raise various questions on the conduct of industries where various parties are involved in different malpractices.

01) Uber: In June 2017, Travis Kalanick, cofounder at Uber, was forced to resign from the CEO position amidst mounting allegations of workplace culture and sexual harassment rampant at the company, which he was accused of having done little to stop.

In the same month, the ride-hailing company saw the departure of the head of business Emil Michael and President Jeff Jones following the incident when they sought medical reports of the rape victim, who was raped by an Uber driver in Delhi.

02) Flipkart-Snapdeal: In July, the months-long Flipkart-Snapdeal merger talk fell apart when Snapdeal decided to pull out of the deal and pursue an independent path to continue its operations.

The merger talks between the two unicorns continued for some months and faced various roadblocks by investors and government regulations.

03) StayZilla: Yogendra Vasupal, founder of start-up Stayzilla, was arrested in March, following an allegation of fraud by Jigsaw, an advertising company, citing Rs 1.69 crore of unpaid dues.

Later in September, a Division Bench of the National Company Law Tribunal (NCLT) in Chennai has ordered the initiation of corporate insolvency resolution process against Inasra Technologies, a parent company of Stayzilla.

The court found that online stay home aggregator has defaulted in the payment of the outstanding debt to Jigsaw Advertising and Solutions along with interest.

04) Oyo-Zo Rooms: Oyo Rooms, which started the talks to acquire rival Zo Rooms in 2015, fell apart in October this year. The company announced that it tried to identify potential value in their business but could not reach an outcome and thus, has ended all discussions on the matter.

Zo responded and said that OYO is resiling from the contractual terms after acquiring the entire ZO Rooms business by March 2016. This is not an act in good faith and Zo takes a very serious view of the matter and will take all steps to protect its interests and enforce its rights.

05) TVF: In April this year, a blog popped up in which an anonymous blogger, under the pseudonym of Indian Fowler, accused TVF CEO Arunabh Kumar of sexually harassing her when she was working with TVF between 2014 and 2016.

In the same month, another post popped up on social media by some other woman alleging a similar case of sexual harassment at the hands of Kumar.

Following the allegations, Kumar was arrested on April 22, 2017, but was released on bail the same day after paying a bond of Rs 10,000.

In June this year, Kumar stepped down from his position following allegations of sexual misconduct.

06) ScoopWhoop: In April, a former female employee of ScoopWhoop levelled charges of sexual assault against the company’s co-founder Suparn Pandey and an FIR was registered in the case. The complainant has also named co-founders Sattvik Mishra and Sriparna Tikekar for aiding and abetting the harassment.

The complainant alleged that throughout her course of employment with the company — between 2015 and 2017 — Pandey passed lewd remarks and publicly humiliated her on her sexuality.

07) AIB: In July, the Mumbai Police Cyber Cell registered an FIR against AIB promoter Tanmay Bhat after he tweeted a post on PM Narendra Modi.

The FIR was registered under section 500 of the IPC (defamation) and 67 of the IT act (punishment for publishing or transmitting obscene material in electronic form).

It all started with an AIB tweet about Prime Minister Narendra Modi’s doppelganger (lookalike) spotted at a railway station. They later added a meme about the PM by using the Snapchat dog filter alongside the previous picture. Initially, this irked some Twitter users followed by a backlash against the comedian.

08) Shopclues: In September this year, Sandeep Aggarwal, founder of online marketplace ShopClues filed an FIR against his estranged wife Radhika Aggarwal (chief business officer at Shopclues) and CEO Sanjay Sethi, alleging forgery and cheating by the duo.

In the complaint, Sandeep alleged that Radhika and Sethi have misappropriated funds and attempted to revoke Aggarwal’s voting rights.

Earlier, Sandeep had publicly accused his wife of pushing him out of the company.

09) Gojavas: In October, Quickdel Logistics, which runs operations under the Gojavas brand, sent a Rs 300-crore legal notice to Jasper Infotech, the parent company of e-commerce platform Snapdeal, and its founders Kunal Bahl and Rohit Bansal.

The notice accused the founders and the company of criminal breach of trust and syphoning off money from GoJavas to Vulcan Express, the in-house logistics firm of Snapdeal.

The Noida-based firm also alleged that Unicommerce has used Paytm’s trade name in an unauthorised way and misled sellers by telling them that it has tied up with Paytm.

The new allegations emerge after a year when Paytm filed a lawsuit against Unicommerce in the Delhi High Court, accusing it of accessing confidential business data on its commerce platform via the sellers on the platform.

About Author

Tausif Alam has more than seven years of experience in the media industry and has worked in both print and digital spaces. He began his career with Economic Times, where he worked for four years, and then switched to YourStory. Tausif is a straight-talker who believes in ‘seedhi baat, no bakwaas’, and aims to say things without mincing words.